Profit from bonus issue net of payments Steps:

• Determine bonus issue value: original share capital $200,000 × (1/4) =$50,000 added to share capital from retained earnings.
• Note payments reducing available profit: debenture interest $18,000 (expense) and interim dividend$22,000 (appropriation).
• Total payments: $18,000 +$22,000 = $40,000.
• Profit for the year: bonus issue value - total payments = $50,000 -$40,000 = $10,000.

Why B is correct:

• Under accounting for bonus issues, the capitalized amount represents profit available after deducting expenses (like interest) and appropriations (like dividends), per the retained earnings transfer rule.

Why the others are wrong:

• A. Ignores bonus issue transfer and treats change in retained earnings plus dividend only.
• C. Miscalculates bonus proportion, e.g., dividing share capital increase by 4.
• D. Subtracts incomplete payments or uses wrong base figure like interest alone.

Final answer: B